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17 July, 19:14

Pharoah Inc. purchased land, building, and equipment from Laguna Corporation for a cash payment of $390,600. The estimated fair values of the assets are land $74,400, building $272,800, and equipment $99,200. At what amounts should each of the three assets be recorded?

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  1. 17 July, 21:28
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    Land = 65100.001

    Building = 238699.999

    Equipment = 86799.99

    Explanation:

    Total Asset Fair Value = Land + Building + Equipment

    Total Asset Fair Value = $74,400+$272,800+$99,200

    Total Asset Fair Value = $446400

    Recorder Amount

    Land = $74,400/$446400 * $390,600

    Land = 65100.001

    Building = $272,800/$446400 * $390,600

    Building = 238699.999

    Equipment = $99,200/$446400 * $390,600

    Equipment = 86799.99
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